QAN
Qantas Airways Limited
ASX
Qantas Acquires Remaining Stake in TripADeal
Sentiment:
Acquisition Announcement
12 June 2024 6:20 PM
Qantas is set to acquire the remaining stake in TripADeal for $211 million, aiming to boost its presence in the online holiday packages market and enhance synergies within the Qantas Group.
Summary
- Qantas will acquire the remaining 49% of TripADeal for $211 million.
- The acquisition aims to expand Qantas Loyalty's reach in the $13 billion online holiday packages market.
- Qantas expects to achieve at least $50 million annually in combined cost and revenue synergies across the Group over time.
- TripADeal's bookings have surpassed $450 million in the last twelve months, doubling pre-COVID levels.
- Matt Wolfenden will become the new CEO of TripADeal, leading a team of 150 based in Byron Bay and tour guides in 30 countries.
- Qantas Loyalty maintains its $800 million $1 billion target for 2030.
- Qantas Loyalty expects to deliver Underlying EBIT in FY24 of $500 $525 million before returning to growth of at least 10 per cent in Underlying EBIT in FY25.
- The acquisition cost of $211 million will be captured within existing Qantas Group capex guidance of $3 $3.2 billion for FY24.
Sentiment
Score: 8
Explanation: The document conveys a positive outlook with the acquisition expected to drive synergies and growth for Qantas Loyalty. The financial targets are maintained, and management expresses confidence in the investment.
Positives
- The acquisition is expected to generate at least $50 million annually in combined cost and revenue synergies.
- TripADeal's bookings have exceeded $450 million in the last 12 months, doubling pre-COVID levels.
- Qantas Loyalty aims for $800 million $1 billion target for 2030.
- Qantas Loyalty expects Underlying EBIT in FY24 of $500 $525 million, with a projected growth of at least 10% in FY25.
- The acquisition will create a more tailored and integrated experience for Qantas Frequent Flyers.
Risks
- Achieving the projected $50 million in annual synergies may face integration challenges.
- Maintaining TripADeal's growth trajectory under new leadership requires effective management.
- Economic downturns could impact demand for holiday packages, affecting revenue.
Future Outlook
Qantas expects the acquisition to deliver a strong result for shareholders with returns exceeding the Qantas Group's internal hurdles, and Qantas Loyalty continues to target $800 million $1 billion for 2030.
Management Comments
- Qantas Loyalty CEO Andrew Glance said: TripADeal has been building on-trend and well-priced holiday offering and realise further synergies, this deal is great news for our customers and the Loyalty business more broadly.
- TripADeal Co-Founders Norm Black and Richard Johnston said: As founders of a home-grown business that has made it easier for millions of Australians to take amazing holidays at the click of a button, this is a proud moment for us.
- TripADeal Co-Founders Norm Black and Richard Johnston said: We have worked hard to build and grow TripADeal from the ground up and know Qantas will take it into a new era of success.
Industry Context
The acquisition reflects a broader trend in the travel industry where airlines are expanding into adjacent businesses like holiday packages to diversify revenue streams and enhance customer loyalty. Competitors like Air New Zealand and Singapore Airlines also offer packaged holidays.
Comparison to Industry Standards
- Other airlines such as Air New Zealand and Singapore Airlines also offer packaged holidays, but Qantas's acquisition of TripADeal gives them a more integrated and controlled platform.
- The projected $50 million in annual synergies is a significant target, comparable to synergy targets in other airline acquisitions, but the actual realization will depend on effective integration.
Stakeholder Impact
- Shareholders can expect strong returns from the investment.
- Employees of TripADeal will be led by a new CEO, Matt Wolfenden.
- Customers will benefit from a more tailored and integrated experience for Qantas Frequent Flyers.
- Suppliers and travel partners will continue to work with TripADeal as an independent business.
Next Steps
- Complete the acquisition of TripADeal by the end of June 2024.
- Integrate TripADeal into the Qantas Loyalty program to realize synergies.
- Focus on member engagement, earn and redemption strategies, and key program partners to drive loyalty growth.
Key Dates
- 2022: Qantas acquired a majority stake in TripADeal.
- Thursday 13 June 2024: Qantas announced it will purchase the remaining 49 per cent of Byron Bay born online travel business TripADeal.
- End of June 2024: Expected completion of the acquisition transaction.
- July 2024: Qantas members will receive a 30 per cent discount on bookings made with points.
- FY24: Qantas Loyalty expects to deliver Underlying EBIT of $500 $525 million.
- FY25: Qantas Loyalty expects to return to growth of at least 10 per cent in Underlying EBIT.
- 2030: Qantas Loyalty retains its $800 million $1 billion target.
Keywords
TripADeal, Qantas, Acquisition, Loyalty, Holiday Packages, Synergies, Frequent Flyers, EBIT
QAN
Qantas Airways Limited
ASX
Sector: Transportation
Filings with Classifications
Worse than expected
10 June 2025 7:15 PM
Strategic Restructure Announcement
- Jetstar Asia was expected to post a $35 million underlying EBIT loss for the financial year prior to the closure decision, indicating poor financial performance.
- The performance of Jetstar Asia deteriorated further in the second half, with an expected underlying EBIT loss of $25 million.
- The closure will result in approximately $175 million in one-off redundancy, restructuring, and non-cash costs, impacting the Group's financials.
- Group International capacity for 2H25 is expected to grow by 9 percent, which is 3 percent lower than previously guided, partly due to industrial action.
Delay expected
10 June 2025 7:15 PM
Strategic Restructure Announcement
- Group International capacity for the second half of FY25 is expected to grow by 9 percent, which is 3 percent lower than previously guided due to the impact of industrial action on Qantas Finnair wet lease.
Delay expected
26 February 2025 4:33 PM
HY25 Investor Presentation
- OEM production process continues to be challenged by supply chain disruption (incl. seat suppliers), with the Group incurring minor aircraft delivery delays.
Better than expected
26 February 2025 4:29 PM
Half Year Results
- The results were better than expected due to strong travel demand and effective cost management.
Delay expected
26 February 2025 4:29 PM
Half Year Results
- The arrival of Qantas's first A321XLR is now expected in June.
Worse than expected
11 September 2024 7:57 PM
Annual Report
- While Qantas reported a statutory profit after tax, the underlying profit before tax decreased significantly compared to the previous year, indicating that the company's performance was worse than expected despite the overall positive financial results.
Delay expected
11 September 2024 7:57 PM
Annual Report
- Delays in the exit of the 717 fleet and entry into service of the A220 fleet impacted Qantas Domestic's performance.
Capital raise
11 September 2024 7:57 PM
Annual Report
- The company announced a $400 million on-market share buy-back to distribute surplus capital.
Worse than expected
7 August 2024 6:38 PM
Update on Executive Remuneration
- The document details significant reductions in executive compensation and penalties due to reputational damage and customer service failures, indicating worse than expected outcomes for the company.
Delay expected
5 May 2024 6:03 PM
Media Release
- Qantas did not promptly notify existing ticketholders that their flights had been cancelled.
Worse than expected
5 May 2024 6:03 PM
Media Release
- Qantas admitted to misleading conduct over a longer period than initially alleged, resulting in a larger number of affected customers and a potentially significant financial penalty.
Worse than expected
5 May 2024 6:00 PM
Settlement Announcement
- The document indicates worse than expected results due to the $100 million civil penalty and $20 million remediation program, stemming from issues with flight cancellation processes.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.